UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K


REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

For the month of May 2024

Commission File Number 001-41676

Himalaya Shipping Ltd.
(Exact name of Registrant as specified in its charter)

Not applicable
(Translation of Registrant’s name into English)


S. E. Pearman Building
2nd floor, 9 Par-la-Ville Road
Hamilton HM 11
Bermuda
(Address of Principal Executive Office)



Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F o




















Exhibits.

ExhibitDescription
Himalaya Shipping Limited Earnings Release for the First Quarter of 2024
Himalaya Shipping Limited Results Presentation for the First Quarter of 2024




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Himalaya Shipping Ltd.
By:/s/ Herman Billung
Name:Herman Billung
Title:Chief Executive Officer
Date: May 23, 2024



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Himalaya Shipping Ltd. (HSHP) Announces its Preliminary Results for the Quarter Ended March 31, 2024

Hamilton, Bermuda, May 23, 2024

Himalaya Shipping Ltd. (“Himalaya,” “Himalaya Shipping” or the “Company”) announces preliminary unaudited results for the quarter ended March 31, 2024.


Highlights for the quarter ended March 31, 2024

•Total operating revenues of $23.6 million, which is an average time charter equivalent (“TCE”) earnings of approximately $30,600 per day, gross1. Average Baltic 5TC Capesize Index was US$24,286 per day.
•Net income of $2.5 million and Adjusted EBITDA2 of $16.8 million for the quarter ended March 31, 2024.
•Converted index linked charters to fixed rate charter for three vessels for varying periods from February 1, 2024 to December 31, 2024.
•Draw down of financing on the three delivered vessels by sale leaseback facilities provided by Jiangsu Financial Leasing Co. Limited (“Jiangsu”) and CCB Financial Leasing Company Limited (“CCBFL”), totaling $98.6 million and $49.2 million, respectively.
•Declaration and payment of cash distribution for January 2024 of $0.01 per common share.
•Declaration of cash distribution for February 2024 of $0.03 per common share, which was paid in April 2024.


Subsequent events
•Successful delivery and commencement of operations in April 2024 of one additional 210,000 dwt Newcastlemax dual fuel newbuilding, Mount Denali, ordered from New Times Shipyard (“NTS”), resulting in a total delivered fleet of ten vessels, with two additional vessels expected to be delivered in June 2024. Mount Denali has been delivered to a major commodity trading company for an initial charter term until December 31, 2026, with an evergreen structure thereafter, and will earn time charter revenue based on an index linked rate plus scrubber premium.
•Conversion of index linked charters on Mount Blanc and Mount Neblina to fixed charters from May 1, 2024 to June 30, 2024 at an average rate of $37,275 per day. The vessels will continue to earn scrubber premium according to the terms of their existing time charter agreements.
•Declaration of cash distribution for March and April 2024 of $0.03 and $0.04 per common share, respectively.

Contracted CEO, Herman Billung commented:

“We are proud of the rapid development of the Company. By the end of June, upon the delivery of our remaining two newbuilds, we are expected to have a sailing fleet of twelve state of the art vessels representing the youngest and most fuel-efficient dry bulk fleet on the water today. All vessels have been employed by reputable counterparties, with the index linked charters earning on average a premium of 42.25% to the Baltic 5TC (BCI) index.

In line with the Company’s strategy to ensure capital discipline and return excess cash flow after debt service and working capital requirements to our shareholders, during the first quarter of 2024, the Company declared its first cash distributions and hopes that these distributions can continue to increase with improving market conditions.”



1 The Company uses certain financial information calculated on a basis other than in accordance with accounting principles generally accepted in the United States (US GAAP) including average daily TCE earnings, gross and Adjusted EBITDA. Average daily TCE earnings, gross, as presented above, represents time charter revenues and voyage charter revenues adding back address commissions and divided by operational days. Please refer to the appendix of this release for a reconciliation of this non-GAAP measure to the most directly comparable financial measures prepared in accordance with US GAAP.
2 Adjusted EBITDA as presented above represents our net income (loss) plus depreciation of vessels and equipment; total financial expenses, net; and income tax expense. Please refer to the appendix of this report for a reconciliation of this non-GAAP financial measure to the most directly comparable financial measures prepared in accordance with US GAAP.

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Management discussion and analysis

The discussion below compares the preliminary unaudited results for the three months ended March 31, 2024 to the unaudited results of the three months ended December 31, 2023:

(in $ thousands)
Three months ended March 31, 2024
Three months ended December 31, 2023
Change ($)Change (%)
Total operating revenues
23,581 18,321 5,260 29 %
Vessel operating expenses
(4,928)(3,585)(1,343)37 %
Voyage expenses(334)(234)(100)43 %
General and administrative expenses
(1,472)(1,078)(394)37 %
Depreciation and amortization
(5,430)(3,580)(1,850)52 %
Total operating expenses
(12,164)(8,477)(3,687)43 %
Operating profit
11,417 9,844 1,573 16 %
Total financial expenses, net
(8,925)(5,238)(3,687)70 %
Net income
2,492 4,606 (2,114)(46)%
Adjusted EBITDA
16,847 13,424 3,423 25 %

(in $ thousands)
March 31, 2024December 31, 2023Change ($)Change (%)
Cash and cash equivalents25,727 25,553 174 1 %
Vessels and Equipment647,665 428,617 219,048 51 %
Newbuildings67,116 132,646 (65,530)(49)%
Total Equity155,067 154,205 862 1 %

Total operating revenues for the quarter ended March 31, 2024 were $23.6 million, a $5.3 million increase compared to the quarter ended December 31, 2023. The increase is a result of the delivery and commencement of operations of three additional vessels during the period, Mount Bandeira, Mount Hua and Mount Elbrus. The average TCE earnings decreased from $34,400/day in the prior quarter to $30,600/day in the current quarter.

Vessel operating expenses for the quarter ended March 31, 2024 were $4.9 million, a $1.3 million increase compared to the quarter ended December 31, 2023. The increase is a result of an additional three vessels commencing their operation. The Company achieved an average vessel operating cost per day rate3 of $6,200 for the three months ended March 31, 2024.

General and administrative expenses for the quarter ended March 31, 2024 were $1.5 million, a $0.4 million increase compared to the quarter ended December 31, 2023. The increase is primarily a result of the increase in management fees from 2020 Bulkers Management AS for yearly bonuses paid out to employees.

Depreciation and amortization for the quarter ended March 31, 2024 were $5.4 million, a $1.9 million increase compared to the quarter ended December 31, 2023. The overall increase is a result of the commencement of depreciation on the additional three vessels delivered during the quarter.

3 Average vessel operating cost per day is calculated by dividing vessel operating expenses by the number of calendar days in the quarter.

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Total financial expenses for the quarter ended March 31, 2024 were $8.9 million, a $3.7 million increase compared to the quarter ended December 31, 2023. This is mainly due to the increase in interest expense as a result of the increase in outstanding debt following the delivery of the three vessels. Upon delivery of the three vessels during the quarter ended March 31, 2024, the Company closed its sale and leaseback financing arrangements with subsidiaries of Jiangsu and CCBFL whereby upon delivery, the vessels were sold to special purpose vehicles (“SPVs”) owned by Jiangsu and CCBFL and leased back to the Company under bareboat charters. In addition, we had fewer assets qualifying for interest capitalization following the vessel deliveries, resulting in a smaller proportion of interest expense qualifying for capitalization.

Vessels and equipment as of March 31, 2024 was $647.7 million, a $219.0 million or 51% increase compared to $428.6 million as of December 31, 2023. During the period, the Company took delivery of Mount Bandeira, Mount Hua and Mount Elbrus, and upon delivery, the assets were transferred from newbuildings to vessels and equipment and commenced depreciation.

Newbuildings as of March 31, 2024 was $67.1 million, a $65.5 million or 49% decrease compared to $132.6 million as of December 31, 2023. The decrease is a result of the transfer from newbuildings to vessels and equipment upon delivery of the three vessels amounting to $224.5 million, offset by capitalization of expenditures including milestone payments of $157.7 million (which includes scrubber installation costs on Mount Bandeira and Mount Hua of $5.1 million which were paid in December 2023 in advance of their delivery in January 2024 and which were presented as “Other non-current assets” on the consolidated balance sheet as of December 31, 2023), and capitalized interest of $1.3 million.


Cash Flows for the quarter ended March 31, 2024

Net cash provided by operating activities was $11.2 million, compared to $8.4 million in the quarter ended December 31, 2023. The increase is primarily a result of the increase in operating profit in the quarter ended March 31, 2024 due to an increase in the number of operating vessels and operating days.

Net cash used in investing activities was $153.8 million, primarily consisting of $149.9 million for the final installment payments on the delivery of the three vessels (of which $98.6 million and $49.2 million were financed by the sale and leaseback arrangements with Jiangsu and CCBFL, respectively). The remaining amount includes costs of preparation of the vessels for delivery.

Net cash provided by financing activities was $142.8 million primarily consisting of $147.8 million drawn down from the sale and leaseback financing arrangements to pay scheduled delivery installments for the additional three vessels, offset by repayments on the sale and leaseback financings of $3.4 million, deferred financing costs of $1.2 million and dividend payments of $0.4 million.

Liquidity and financing

The Company had cash and cash equivalents of $25.7 million as of March 31, 2024 ($25.6 million as of December 31, 2023) and $10.0 million available to drawdown under the revolving credit facility with Drew Holdings Ltd (the “Drew Facility”). As of March 31, 2024, cash and cash equivalents include $3.0 million which the Company is required to maintain as minimum cash balance under the sale and leaseback arrangements with CCBFL.

One vessel, Mount Denali, was delivered from NTS in April 2024. The final installment payment amounted to $52.3 million, of which $49.2 million was financed by the sale and leaseback arrangement with CCBFL.

As of April 30, 2024, following the delivery of the Mount Denali in April, the Company has a maximum of $98.4 million available to draw down under existing sale leaseback financing agreements with CCBFL for the delivery financing of the remaining two newbuildings to be delivered in June 2024. Remaining installment payments to NTS are $103.8 million, which include costs for scrubber installation.


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All the vessels have been financed by Chinese leasing houses at a fixed bareboat rate with a maturity of seven years from the delivery of each vessel. This gives the Company a fixed financing cost for the delivered vessels until maturity of the lease.

In the first quarter of 2024, the Company declared a cash distribution of $0.01 and $0.03 per share for January and February 2024, respectively. Subsequently, the Company also declared a cash distribution of $0.03 per share for March 2024. It is the Company’s intention to pay a regular dividend in support of our main objective which is to return most of the cash generated after debt service to our shareholders. Any dividends will be at the sole discretion of the Board and will depend upon earnings, market prospects, capital expenditure requirements, available liquidity and distributable reserves, covenants in our debt instruments and other relevant factors. The timing and amount of dividends, if any, is at the discretion of the Board and there is no assurance that the Board will declare dividends in the future or as to the amount or timing of any dividends.


Newbuilding program

One vessel was delivered from NTS in April 2024. The remaining two vessels are scheduled to be delivered as follows:

(numbers in $ million)
Vessel nameTarget delivery datePrice* Remaining installments
Current committed financing
Mount AconcaguaJune 202472.651.949.2
Mount EmaiJune 202472.651.949.2
Total145.2103.898.4
_________________
*Amounts net of address commissions


The newbuilding program is progressing slightly ahead of schedule.

The remaining installments under the Newbuilding program are substantially covered by sale and leaseback financing arrangements which offers both pre- and post- delivery financing.

The ships have dual fuel capabilities and scrubbers installed. This means the ships can run on LNG, High Sulfur Fuel Oil (HSFO) or Low Sulfur Fuel Oil (LSFO). This offers the charterers significant flexibility when it comes to choosing fuel, potentially giving large economic savings. Himalaya Shipping Ltd. is entitled to 75% of these economic savings. When running on LNG there will also be potential CO2 savings, of which Himalaya Shipping Ltd. is entitled to 75% of the corresponding savings, in the case carbon taxes are applicable.


Commercial update

In the first quarter of 2024 the Company achieved average TCE earnings of approximately $30,600 per day, gross.

In addition, in the first quarter of 2024, the Company’s vessels trading on index linked time charters earned approximately $35,100 per day, gross, including average daily scrubber and LNG benefits of approximately $2,200 per day. Following the conversion of the index linked charters to fixed rate time charters, the Company’s vessels trading on fixed rate time charters earned approximately $28,500 per day, gross, including average daily scrubber and LNG benefits of approximately $3,100 per day.

The Baltic 5TC Capesize Index averaged $24,286 per day in the first quarter of 2024.


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Fleet status

In the first quarter of 2024, the Company agreed to convert its index linked charters to fixed rate time charters for Mount Bandeira and Mount Hua from February 1, 2024 to June 30, 2024, and for Mount Etna from April 1, 2024 to December 31, 2024.

In April 2024, the Company agreed to convert its index linked charters to fixed rate time charters for Mount Blanc and Mount Neblina from May 1, 2024 to June 30, 2024.

The table below sets forth information about our fleet and charters.

Vessel name
Built
Type
2024202520262027
Q2
Q3
Q4
Q1
Q2
Q3Q4Q1Q2Q3Q4Q1Q2
Mount Norefjell
2023
DF Newcastlemax
30,0001
Mount Ita
2023
DF Newcastlemax
Index
Mount Etna2
2023
DF Newcastlemax
40,810
Index1
Mount Blanc2
2023
DF Newcastlemax
3
Index1
Mount Matterhorn2023
DF Newcastlemax
Index
Mont Neblina2
2023
DF Newcastlemax
4
Index1
Mount Bandeira2
2024
DF Newcastlemax
5
Index1
Mount Hua2
2024
DF Newcastlemax
6
Index1
Mount Elbrus2024
DF Newcastlemax
Index
Mount Denali2024
DF Newcastlemax
Index1
Mount Acancagua2024
DF Newcastlemax
Index
Mount Emai2024
DF Newcastlemax
Index

Option
Under construction
Available

1 Evergreen structure
2 These vessels will continue to earn scrubber premium according to the terms of their existing time charter agreements.
3 $37,800 fixed rate per day
4 $36,750 fixed rate per day
5 $28,350 fixed rate per day
6 $25,382.50 fixed rate per day

Market commentary

The Baltic 5TC Capesize index as of May 14, 2024 stands at $24,311 having averaged $23,355 year to date, an increase from $11,482 during the same period in 2023.
The Capesize market performed strongly during the first quarter of 2024, with the Baltic 5TC index averaging $24,286, up from $9,114 during the first quarter of 2023. The strong market was driven by continued strong Brazilian iron ore exports, as a result of drier than usual weather. Bauxite exports out of West Africa continue to show strength, giving owners of vessels in ballast from the East an alternative to Brazil. Long-haul coal exports from Colombia have also contributed to an increase in ton miles.

Overall Capesize trade growth has been strong, with ton-miles sailed on Capesize vessels increasing by 9% compared to the same period last year.


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Currently, the increase in Capesize ton-miles this year is mainly driven by a 10.9% increase in Brazilian iron ore exports, offsetting a 0.6% contraction in Australian export volumes. Bauxite volumes have remained decent, showing a 1% decline, following a growth of more than 30% in 2023. For the coal trade, ton-miles increased by 0.5% year on year.

Global crude steel production for 2024 year to date increased by 1.4%. Chinese steel production decreased 3.1% while production in the rest of the world increased by 4.8%.

Chinese iron ore imports are up by 6% year to date, following a growth of 6% in 2023. Chinese iron ore port inventories have increased both in nominal and seasonal terms, and currently stand at 145 million tons, compared to 128 million tons a year ago.

China’s property sector continues to face challenges with housing sales contracting for the third consecutive year. March 2024 was, however, the first month since September 2023 showing a decline in available floor space in China’s commercial buildings.

Growth in vessel supply is expected to be moderate in the coming years with expected Capesize deliveries of 4.5 million dwt (or 1.1% of existing fleet) for the remainder of 2024, 7.1 million dwt (or 1.8%) in 2025 and 6.5 million dwt (or 1.6%) in 2026, down from 10.7 million dwt delivered in 2023. Because of the high ordering in other shipping segments, Chinese yards are believed to have very limited capacity for ordering of large drybulk vessels before 2028, with orders recently having been placed for delivery as late as 2029. This gives good visibility for what we expect to be limited supply growth in the coming years. New ordering is expected to remain subdued in part driven by uncertainties as it relates to the optimal propulsion systems to meet the shipping industry’s ambitions for de-carbonization. Current newbuilding costs for a dual-fuel Newcastlemax in China is believed to be approximately US$94 million.

We see potential upside to the future development in the Capesize market from current levels in the event of continued strong exports of iron ore and bauxite from Brazil and West Africa, as well as increased coal imports following new restrictions being put in place for Chinese domestic coal miners starting May 1, 2024.

Key downside risks to the Capesize market include a continued economic slowdown in China, as well as heightened geopolitical tensions. Continued weakness in the Chinese property sector also represents an ongoing risk to Chinese steel demand.

Capesize fleet development

The global Capesize fleet stands at 397 million dwt as of May 1, 2024, up from 388 million dwt in May 2023. The current orderbook for Capesize dry bulk vessels currently stands at 6.2% of the existing fleet, up from 5.3% in February 2023.

3.7 million dwt has been ordered in 2024 so far, compared to 0.4 million dwt during the same period in 2023. 0.523 million dwt has been scrapped so far in 2024, compared to 0.25 million dwt during the same period in 2023.


Operational update

In the quarter ended March 31, 2024, our fleet had 798 operational days, a utilization of 99.8% of our delivered vessels.


Outlook

The underlying market over the last months reflects a better balance between supply and demand, indicated by an increase in rates by approximately 100%. It is expected that a historic low order book of 6%, an aging fleet with an average age of 10.9 years and limited yard capacity should pave the way for a robust dry bulk market in the coming years.


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Himalaya Shipping should be well positioned to take advantage of this expected opportunity with our modern fleet meeting the regulatory challenges facing a majority of the cape size fleet in the coming years. According to Clarksons, more than 52% of the fleet will be older than 15 years by 2027.

Himalaya’s structure, with index linked charters earning on average a 42.25% premium to the Baltic 5TC (BCI) index, low G&A costs and financing with seven-year fixed bareboat rates, positions us well to continue delivering solid returns to our shareholders in the coming years.

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Forward looking statements

This press release and any related discussions contain forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not reflect historical facts and may be identified by words such as “aim”, “believe,” “assuming,” “anticipate,” “could”, “expect”, “intend,” “estimate,” “forecast,” “project,” “likely to”, “plan,” “potential,” “will,” “may,” “should,” or other similar expressions and include statements about plans, objectives, goals, strategies, future events or performance, including outlook, prospects, contracts to acquire newbuilding vessels and associated financing agreements, expected delivery of our vessels under our newbuilding program, statements about the benefits of our vessels, including the ability to bunker with LNG, LSFO, or HSFO, the terms of our charters and chartering activity, dry bulk industry trends and market outlook, including activity levels in the industry, expected trends, including trends in the global fleet, expected demand for vessels and utilization of the global fleet and our fleet, fleet growth, new orderings, limited yard capacity, statements about our dividend objectives and plans and hope of continued increasing dividend, statements made in the sections above entitled “Market commentary” and “Outlook,” including the yard situation, expected growth in vessel supply and state of current global fleet, and other non-historical statements. These forward-looking statements are not statements of historical fact and are based upon current estimates, expectations, beliefs, and various assumptions, many of which are based, in turn, upon further assumptions, and a number of such assumptions are beyond our control and are difficult to predict. These statements involve significant risks, uncertainties, contingencies and factors that are difficult or impossible to predict and are beyond our control, and that may cause our actual results, performance or achievements to be materially different from what is expressed, implied or forecasted in such forward-looking statements including:

•general economic, political and business conditions;
•general dry bulk market conditions, including fluctuations in charter hire rates and vessel values;
•our ability to complete the purchase of the vessels we have agreed to acquire and on schedule;
•our ability to meet the conditions and covenants in our financing agreements;
•changes in demand in the dry bulk shipping industry, including the market for our vessels;
•changes in the supply of dry bulk vessels;
•our ability to successfully re-employ our dry bulk vessels at the end of their current charters and the terms of future charters;
•changes in our operating expenses, including fuel or bunker prices, dry docking and insurance costs;
•changes in governmental regulation, tax and trade matters and actions taken by regulatory authorities;
•compliance with, and our liabilities under, governmental, tax, environmental and safety laws and regulations;
•potential disruption of shipping routes due to accidents, hostilities or political events;
•our ability to refinance our debt as it falls due;
•our continued borrowing availability under our sale and leaseback agreements in connection with our vessels and compliance with the financial covenants therein;
•fluctuations in foreign currency exchange rates;
•potential conflicts of interest involving members of our board and management and our significant shareholder;
•our ability to pay dividends and the amount of dividends we ultimately pay;
•risks related to climate change, including climate-change or greenhouse gas related legislation or regulations and the impact on our business from climate-change related physical changes or changes in weather patterns, and the potential impact of new regulations relating to climate change, as well as the impact of the foregoing on the performance of our vessels;
•other factors that may affect our financial condition, liquidity and results of operations; and
•other risks described under "Item 3. Key Information - D. Risk Factors" in our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on March 27, 2024.


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You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Himalaya Shipping undertakes no and expressly disclaims any obligation to update publicly any forward-looking statements after the date of this press release whether as a result of new information, future events or otherwise, except as required by law.


May 23, 2024

The Board of Directors
Himalaya Shipping Limited
Hamilton, Bermuda


Questions should be directed to:

Herman Billung: Contracted CEO, +4791831590 

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INTERIM FINANCIAL INFORMATION

FIRST QUARTER 2024

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Himalaya Shipping Ltd.
Unaudited Consolidated Statements of Operations
(In $ thousands except share and per share data)

Three months ended March 31, 2024
Three months ended March 31, 2023
Operating revenues
Time charter revenues
23,581 1,442 
Total operating revenues
23,581 1,442 
Operating expenses
Vessel operating expenses
(4,928)(252)
Voyage expenses and commissions
(334)(10)
General and administrative expenses
(1,472)(531)
Depreciation and amortization
(5,430)(392)
Total operating expenses
(12,164)(1,185)
Operating profit
11,417 257 
Financial income (expenses), net
Interest income
193 10 
Interest expense, net of amounts capitalized
(9,133)(298)
Other financial expenses, net
15 8 
Total financial income (expenses), net
(8,925)(280)
Net income (loss) before income tax
2,492 (23)
Income tax (expense) / credit
— — 
Net income (loss) attributable to shareholders of Himalaya Shipping Ltd.
2,492 (23)
Total comprehensive income (loss) attributable to shareholders of Himalaya Shipping Ltd.
2,492 (23)
Basic and diluted earnings (loss) per share
0.06 — 


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Himalaya Shipping Ltd.
Unaudited Consolidated Balance Sheets
(In $ thousands except share and per share data)

March 31, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
25,727 25,553 
Trade receivables
1,295 811 
Other current assets
6,784 6,443 
Total current assets
33,806 32,807 
Non-current assets
Newbuildings
67,116 132,646 
Vessels and equipment, net
647,665 428,617 
Other non-current assets
— 5,136 
Total non-current assets
714,781 566,399 
Total assets
748,587 599,206 
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities
Current portion of long-term debt22,352 19,795 
Trade payables
1,299 1,693 
Accrued expenses
7,438 2,531 
Other current liabilities
1,528 1,281 
Total current liabilities
32,617 25,300 
Non-current liabilities
Long-term debt
560,903 419,701 
Total non-current liabilities
560,903 419,701 
Total liabilities
593,520 445,001 
Shareholders’ Equity
Common shares of par value $1.00 per share: authorized 140,010,000 (2023: 140,010,000) shares, issued and outstanding 43,900,000 (2023: 32,152,857) shares
43,900 43,900 
Additional paid-in capital14,038 111,788 
Contributed surplus96,120 — 
Retained earnings (Accumulated deficit)
1,009 (1,483)
Total shareholders’ equity
155,067 154,205 
Total liabilities and shareholders’ equity748,587 599,206 


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Himalaya Shipping Ltd.
Unaudited Consolidated Statements of Cash Flows
(In $ thousands except share and per share data)

Three months ended March 31, 2024
Three months ended March 31, 2023
Cash Flows from Operating Activities
Net income (loss)2,492 (23)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Non-cash compensation expense related to stock options126 141 
Depreciation of vessels5,430 392 
Amortization of deferred finance charges505 120 
Change in assets and liabilities:
Accounts receivable(483)(29)
Accounts payable(394)2,312 
Accrued expenses3,590 617 
Other current and non-current assets(340)(2,547)
Other current liabilities
246 1,586 
Net cash provided by operating activities
11,172 2,569 
Cash Flows from Investing Activities
Additions to newbuildings
(153,812)(130,815)
Net cash used in investing activities
(153,812)(130,815)
Cash Flows from Financing Activities
Proceeds from issuance of long-term and short-term debt (net of deferred loan costs paid to lender)
147,850 132,695 
Deferred loan costs paid
(1,148)(1,543)
Proceeds from issuance of long-term debt from related party
— 1,020 
Repayment of long-term debt from related party— (2,020)
Repayment of long-term and short-term debt(3,449)(1,188)
Dividend payment(439)— 
Net cash provided by financing activities
142,814 128,964 
Net increase in cash, cash equivalents and restricted cash
174 718 
Cash, cash equivalents and restricted cash at the beginning of the period
25,553 263 
Cash, cash equivalents and restricted cash at the end of the period
25,727 981 
Supplementary disclosure of cash flow information
Three months ended March 31, 2024
Three months ended March 31, 2023
Interest paid, net of capitalized interest(5,641)(1,560)

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Himalaya Shipping Ltd.
Unaudited Consolidated Statements of Changes in Shareholders' Equity
(In $ thousands except share and per share data)

Number of outstanding sharesCommon sharesAdditional paid in capitalContributed surplusAccumulated deficitTotal equity
Balance as at December 31, 202232,152,857 32,153 61,171 — (2,997)90,327 
Share-based compensation— 141 — — 141 
Total comprehensive loss
— — — (23)(23)
Balance as at March 31, 202332,152,857 32,153 61,312 — (3,020)90,445 
Balance as at December 31, 202343,900,000 43,900 111,788 — (1,483)154,205 
Transfer to contributed surplus— (97,876)97,876 — — 
Share based compensation— 126 — — 126 
Dividends
— — (1,756)— (1,756)
Total comprehensive income
— — — 2,492 2,492 
Balance as at March 31, 202443,900,000 43,900 14,038 96,120 1,009 155,067 

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APPENDIX

UNAUDITED NON GAAP MEASURES AND RECONCILIATIONS

Average TCE earnings is a non-U.S. GAAP measure of the average daily revenue performance of a vessel. Set forth below is a reconciliation of average TCE earnings to total operating revenues for the periods presented.

In $ thousands, except per day and number of days
Three months ended
March 31, 2024December 31, 2023Change% Change
Total operating revenues23,581 18,321 5,260 29 %
Add: Address commissions840 684 156 23 %
Total operating revenues, gross24,421 19,005 5,416 28 %
Fleet operational days798 552 246 45 %
Average TCE earnings30,600 34,400 (3,800)(11)%

We present Adjusted EBITDA because we believe this measure increases comparability of total business performance from period to period and against the performance of other companies. Set forth below is a reconciliation of Adjusted EBITDA to net income for the periods presented.

Three months ended
In $ thousands
March 31, 2024December 31, 2023Change% Change
Net income
2,492 4,606 (2,114)(46)%
Depreciation and amortization5,430 3,580 1,850 52 %
Total financial expenses, net8,925 5,238 3,687 70 %
Income tax— — — — %
Adjusted EBITDA
16,847 13,424 3,423 25 %

Non-GAAP financial measures may not be comparable to similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under U.S. GAAP.




1 Himalaya Shipping Ltd. Q1 2024 Results Presentation 23 May 2024

 
2 DISCLAIMER Forward Looking Statements This results presentation and any related discussions contain forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not reflect historical facts and may be identified by words such as “aim”, “believe,” “assuming,” “anticipate,” “could”, “expect”, “intend,” “estimate,” “forecast,” “project,” “likely to”, “plan,” “potential,” “will,” “may,” “should,” “indicative,” “illustrative,” “potential” or other similar expressions and include statements about plans, objectives, goals, strategies, future events or performance, including outlook, prospects, contracts to acquire newbuilding vessels and associated financing agreements, including expected timing of delivery of our vessels under our newbuilding program, expected growth in the capesize market, cash return potential based on different scenarios and assumptions, statements about the benefits of our vessels, including the flexibility and ability to bunker with LNG, LSFO, or HSFO, fuel flexibility premium potential, estimated break-even, the terms of our charters and chartering activity, dry bulk industry trends and market outlook, including activity levels in the industry, expected trends, including trends in the global fleet, expected demand for and supply of vessels and utilization of the global fleet and our fleet, including expected average rates, fleet growth, new orderings, the impact of an aging global fleet, trends in iron ore and coal imports, limited supply growth of dry bulk vessels and yard capacity, replacement needs and capacity going into dock, statements about our dividend objectives and plans, and other non-historical statements. These forward-looking statements are not statements of historical fact and are based upon current estimates, expectations, beliefs, and various assumptions, many of which are based, in turn, upon further assumptions, and a number of such assumptions are beyond our control and are difficult to predict. These statements involve significant risks, uncertainties, contingencies and factors that are difficult or impossible to predict and are beyond our control, and that may cause our actual results, performance or achievements to be materially different from what is expressed, implied or forecasted in such forward-looking statements. Numerous factors, risks and uncertainties that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed, implied or forecasted in the forward-looking statements include: general economic, political and business conditions; general dry bulk market conditions, including fluctuations in charter hire rates and vessel values; our ability to complete the purchase of the vessels we have agreed to acquire and on schedule; our ability to meet the conditions and covenants in our financing agreements; changes in demand in the dry bulk shipping industry, including the market for our vessels; changes in the supply of dry bulk vessels; our ability to successfully employ our dry bulk vessels at the end of their current charters and the terms of future charters; changes in our operating expenses, including fuel or bunker prices, dry docking and insurance costs; changes in governmental regulation, tax and trade matters and actions taken by regulatory authorities; compliance with, and our liabilities under governmental, tax, environmental and safety laws and regulations; potential disruption of shipping routes due to accidents, hostilities or political events; our ability to procure or have access to financing and to refinance our debt as it falls due; our continued borrowing availability under our sale and leaseback agreements in connection with our vessels and compliance with the financial covenants therein; fluctuations in foreign currency exchange rates; potential conflicts of interest involving members of our board and management and our significant shareholder; our ability to pay dividends and the amount of dividends we ultimately pay; risks related to climate change, including climate-change or greenhouse gas related legislation or regulations and the impact on our business from climate-change related physical changes or changes in weather patterns, and the potential impact of new regulations relating to climate change, as well as the impact of the foregoing on the performance of our vessels; other factors that may affect our financial condition, liquidity and results of operations; and other risks described under “Item 3. Key Information — D. Risk Factors” in our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on March 27, 2024. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Himalaya Shipping undertakes no obligation to update publicly any forward-looking statements after the date of this press release whether as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measures This presentation contains certain selected financial measures on a basis other than U.S. generally accepted accounting principles (“GAAP”), including average daily TCE earnings, gross, Adjusted EBITDA, and illustrative free cash flow. Average daily TCE earnings, gross, as presented here, represents time charter revenues and voyage charter revenues adding back address commissions and divided by operational days. Adjusted EBITDA represents our net income/(loss) plus depreciation of vessels and equipment; total financial expenses, net; and income tax expense. Adjusted EBITDA is presented here because the Company believes this measure increases comparability of total business performance from period to period and against the performance of other companies. For a reconciliation of Adjusted EBITDA and average daily TCE earnings, gross, to the most directly comparable financial measures prepared in accordance with US GAAP, please see the section of our preliminary results for the quarter ended March 31, 2024, Appendix entitled “Unaudited Non-GAAP Measures And Reconciliations”. For a discussion of illustrative free cash flow see slide 17 including the footnotes thereto. We are unable to prepare a reconciliation of illustrative free cash flow without unreasonable efforts.

 
3 Highlights Q1 2024 Highlights: • Total operating revenues of $23.6 million, an average time charter equivalent earnings of approximately US$30,600/day, gross. • Net income of $2.5 million and adjusted EBITDA of $16.8 million for the quarter ended March 31, 2024. • Successful delivery and commencement of operations of an additional three Newcastlemax dual fuel newbuildings in January 2024. • Final instalments for two delivered vessels financed by sale and leaseback facilities provided by wholly-owned subsidiaries of Jiangsu Financial Leasing Co. Ltd. totalling $98.6 million. • Final instalment for one delivered vessel financed by sale and leaseback facility provided by a wholly-owned subsidiary of CCB Financial Leasing Co. Ltd. (“CCBFL”) totalling $49.2 million. • Conversion of index linked charters on Mount Bandeira and Mount Hua to fixed charters from February 1, 2024 to June 30, 2024 at an average of $26,866 per day. • Conversion of index linked charter on Mount Etna to fixed charter from April 1, 2024 to December 31, 2024 at $40,810 per day. • Declaration and payment of cash distribution for January 2024 of $0.01 per common share. • Declaration of cash distribution for February 2024 of $0.03 per common share, which was paid in April 2024. Subsequent events: • Declaration of cash distribution for March 2024 and April 2024 of $0.03 and $0.04, respectively, per common share. • Conversion of index linked charters on Mount Neblina and Mount Blanc to fixed charters from May 1, 2024 to June 30, 2024 at $36,750 and $37,800 per day respectively. • Delivery and commencement of operations of Mount Denali in April 2024.

 
4 Key Financials Q1 2024 Income statement Comments US$ millions, except per share data Q1 2024 Q4 2023 Variance Operating revenues 23.6 18.3 5.3 Vessel operating expenses (4.9) (3.6) (1.3) Voyage expenses and commission (0.4) (0.2) (0.2) General and administrative expenses (1.5) (1.1) (0.4) Depreciation and amortization (5.4) (3.6) (1.8) Total operating expenses (12.2) (8.5) (3.7) Operating profit 11.4 9.8 1.6 Interest expense (9.1) (5.6) (3.5) Other financial items 0.2 0.4 (0.2) Total financial expense, net (8.9) (5.2) (3.7) Tax expense - - - Net income (loss) 2.5 4.6 (2.1) Earnings per share 0.06 0.11 Adjusted EBITDA 16.8 13.4 3.4 • Increase in operating revenues of $5.3 million in Q1 2024, due to additional 3 vessels delivered in January 2024. Average TCE, gross of approx. US$30,600/day in Q1 2024 vs US$34,400/day in Q4 2023. • Cash break-even TCE estimated to be approximately $24,600/ day. • Increase in vessel operating expenses of $1.3 million in Q1 2024 due to additional 3 vessels delivered in January 2024. Average vessel operating expenses of approx. $6,200/day per vessel in Q1 2024 vs $6,500/day per vessel in Q4 2023. • General and administrative expenses increased by $0.4 million in Q1 2024 mainly due to bonuses paid of $0.3 million. • Increase in Interest expense of $3.5 million in Q1 2024 due to higher loan principal following the sale and leaseback financing on the 3 vessels delivered in January 2024. • Increase in operating profit by $1.6 million in Q1 2024. • Net income of $2.5 million in Q1 2024 vs $4.6 million in Q4 2023. • Adjusted EBITDA of $16.8 million in Q1 2024, an increase of $3.4 million over Q4 2023.

 
5 Key Financials Q1 2024 Balance Sheet Summary Comments US$ millions March 31, 2024 December 31, 2023 Variance Cash and cash equivalents 25.7 25.6 0.1 Vessels and equipment 647.7 428.6 219.1 Newbuildings 67.1 132.6 (65.5) Total assets 748.6 599.2 149.4 Short-term and long-term debt 583.3 439.5 143.8 Total equity 155.1 154.2 0.9 • Net cash generated by operating activities in Q1 2024 of $11.1 million. • Net cash used in investing activities in Q1 2024 was $153.8 million, primarily relating to the final instalment on the 3 vessels delivered in January 2024, net of $5.1 million on the charterer’s portion which was paid in December 2023. • Net cash provided by financing activities in Q1 2024 was $142.8 of which $147.8 million was from the sale and leaseback financing on the 3 vessels delivered in January 2024, partially offset by deferred loan costs of $1.1 million, loan repayments of $3.4 million and cash distribution paid of $0.4 million; • Vessels and equipment increased primarily due to the delivery of 3 vessels in January 2024. • Decrease in newbuildings was primarily due to the delivery of 3 vessels in January 2024. • Increase in short-term and long-term debt was primarily due to the closing of the sale and leaseback financing on the 3 vessels delivered in January 2024, offset by loan repayments. • Total remaining shipyard capex (inc scrubbers) of $155.7 million. Current committed sale lease-back financing of $147.6 million. • $10 million available to draw-down under the RCF with Drew Holdings Ltd.

 
6 Fleet status report – May 2024 Chartering position

 
7 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 J F M A M J J A S O N D 2015-23 max-min range 2015-23 average 2024 2023 Baltic 5TC index rate Strongest start to the year since 2010 YTD average rate $23k/day up 110% Y/Y

 
8 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Iron ore Coal Grains Minor Bulk Strong demand Tonne-mile demand historically outpaced volume growth Solid demand YTD up 11% Source: Clarksons Shipping Intelligence Network (https://sin.clarksons.net/) as of May 20, 2024 3.9% 4.2% Tonnes (CAGR 2000 – 2023) Tonne-mile (CAGR 2000 – 2023) Global seaborne trade volume (billion tonne-miles)

 
9 Capesize shipping – a growth market Simandou Guinea iron ore project Potentially requires 170 capesize Source: Clarksons A long-haul trade 6 30 78 110 110 110 9 46 121 170 170 170 - 20 40 60 80 100 120 140 160 180 - 20 40 60 80 100 120 140 160 180 200 C ap es M ill io n to nn es Simfer WCS Capesize equivalents* Rio Tinto and CIOH targets 110 MT/year of iron ore from mines Simfer and WCS by 2028 - start-up 2025 ~11,000 nautical miles - similar to Brazil to China trade Project alone requires 170 capesize equivalent ships vs orderbook of 96 ships Guinea to China ~11k miles Australia to China ~4.8k miles

 
10 China – iron ore and coal imports gaining traction China iron ore imports (MT/month) China coal imports (MT/month) 0.0 20.0 40.0 60.0 80.0 100.0 120.0 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 17 20 18 20 19 20 20 20 21 20 22 20 23 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 17 20 18 20 19 20 20 20 21 20 22 20 23 Imported iron ore @ 62% Fe content vs China domestic @ 25% Fe content – imports to gain market share as higher quality iron ore reduces CO2 emissions – current market share 74% Market share imported coal growing driven by higher quality coal imports and environmental crack-down on high-risk mining production in China – market share now ~10% vs 3% in Q1 2022

 
11 0 50 100 150 200 250 300 350 400 450 2000 2003 2006 2009 2012 2015 2018 2021 2024 Capesize fleet mDWT Capesize orderbook mDWT 0 50 100 150 200 250 300 350 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 Ac tiv e Sh ip ya rd s, T ot al No. Active Shipyards, Global 20,000+ dwt Limited supply of new ships 25 year low orderbook Significant reduction in yard capacity Source: Clarksons Shipping Intelligence Network (https://sin.clarksons.net/) (59%) Orderbook 6.2% of fleet

 
12 Significant replacement needs Capesize+ fleet by delivery year in # ships Source: Clarksons Shipping Intelligence Network (https://sin.clarksons.net/) 60% of the fleet >20 years by 2033 Year # ships turning 20 years % of fleet >20 years Current 77 4% 2024 22 1% 2025 47 7% 2026 58 10% 2027 56 13% 2028 45 15% 2029 110 21% 2030 212 31% 2031 251 44% 2032 214 55% 2033 103 60% 0 50 100 150 200 250 300 350 19 93 19 96 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 20 11 20 12 20 13 20 14 20 15 20 16 20 17 20 18 20 19 20 20 20 21 20 22 20 23 20 24 20 25 20 26 20 27 Delivered Newbuildings Vessels built before 20093 Vessels built between 2009 and 20153 Vessels built post-2016 unaffected by 20303 306 ships – 15% 1,072 ships – 51% 734 ships – 35% Unlikely to be able to build significant capacity before 2028

 
13 Aging fleet means less productivity Speed trending down – inefficient ships slowing down most More capacity going into dock Source: Clarksons Shipping Intelligence Network (https://sin.clarksons.net/), ABG Sundal Collier 1.0% 1.0% 1.4% 1.6% 1.5% 1.3% 1.2% 1.6% 1.8% 1.7% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2023 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2031e 2032e % of annual transport capacity taken out in docking (est) Increasing speed difference A-C ships (efficient ships) vs D-E ships (inefficient ships) 10.00 10.20 10.40 10.60 10.80 11.00 11.20 11.40 11.60 11.80 12.00 Ja n- 20 21 M ar -2 02 1 M ay -2 02 1 Ju l- 20 21 Se p- 20 21 N ov -2 02 1 Ja n- 20 22 M ar -2 02 2 M ay -2 02 2 Ju l- 20 22 Se p- 20 22 N ov -2 02 2 Ja n- 20 23 M ar -2 02 3 M ay -2 02 3 Ju l- 20 23 Se p- 20 23 N ov -2 02 3 Ja n- 20 24 M ar -2 02 4 2023 CII A-C rating (knots) 2023 CII D-E rating (knots) No significant increase in spee even with improved market since Oct 2023

 
14 Himalaya have the right ships 43% more CO2 efficient than a standard Capesize1 1. When running on LNG, basis 43 mT pr day fuel consumption and 3.2 CO2 pr mT for a 180k dwt 2014/15 built Capesize vessel and 28 mT pr day fuel consumption and 2.8 CO2 pr mT for a Himalaya newbuild. Source: Bloomberg and Company estimates . 2. Himalaya Shipping vessel is estimated to save 43% compared to a Bimco standard Cape, and realise a 25% saving through a carbon savings clause. CO2 pr day (mT) 138 78 180k dwt 2014/15 built Capesize vessel Himalaya Newcastlemax LNG propulsion (43%) CO2 Dual fuel gives flexibility Himalaya have fuel flexibility – can run on LNG, HFO or VLSFO Current LNG prices (April 2024) quoted by Affinity Shipbrokers as the cheapest fuel option LNG bunkering operations on Mount Matterhorn

 
15 1. 2023 average of the 5 T/C Routes for Baltic Capesize Index of $16,363. 2. Scrubber benefit based on VLSFO – HSFO spread of $150 basis Singapore bunkering for average March 2024. 3. Premium achieved will depend on the terms Himalaya Shipping is able to achieve in contracts entered into, including the variable scrubber earnings. Source: Clarksons Shipping Intelligence Network (https://sin.clarksons.net/) as of March, 2024, Bloomberg and Company estimates Fuel flexibility unlocking premium potential vs. conventional vessels Himalaya have the right ships 2023 average Capesize Index1 17% larger cargo intake • 175k tonnes BIMCO BCI 5TC 2014-built Capesize • 205k tonnes Himalaya DF LNG Newcastlemax 28% lower laden fuel consumption • 43 mT3 BIMCO BCI 5TC 2014- built Capesize • 33 mT3 Himalaya DF LNG Newcastlemax ~25% scrubber earnings premium potential2 ~70% potential3 when reflecting theoretical size and fuel benefits combined with scrubber premium 16 400 2 788 4 620 3713 27 521 $/day

 
16 Value of ship (average purchase price) $m 71.6 Financing (average debt financing)1 " 63.1 Loan to purchase price % 88% Fixed bareboat day-rate2 $/day 16,567 Scrubber financing3 $/day 841 Estimated Opex " 6,400 Estimated SG&A " 732 Estimated cash break-even " 24,540 Estimated scrubber benefit when sailing4 $/day (3,100) Earnings premium5 42% (6,300) Capesize index eq cash break-even rate $/day ~15.9006 Himalaya have the right financing Estimated cash break-even of a fully delivered basis 1. Based on Company estimated average debt financing for 12 vessels, including scrubber financing for four vessels. 2. Blended fixed bareboat day-rate. 3. Floating interest rate scrubber financing for four vessels. 4. VLSFO – HSFO spread of $150 basis Singapore bunkering for a consumption of 10,000 tons per year with 75% benefit to the Shipowner. Platts quoted bunker spread 14 Feb 2024 is $210/t. 5. 11 index-linked charters with a contracted premium to BCI 5TC of 42%. Source: Clarksons Shipping Intelligence Network (https://sin.clarksons.net/) as of February 14, 2024 and Company estimates. 6. Capesize index rate adjusted for 5% commission Last upcycle Capesize rates vs. est. equivalent cash break-even 1 year Capesize timecharter rates 2003 – 2010, ($/day) 0 50,000 100,000 150,000 200,000 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 ~ 15,900 Oct 2008 118.4% Orderbook to fleet %Dec 2003 20.2% Orderbook to fleet %

 
17 1. This information has been prepared for illustrative purposes only and does not represent the Company’s forecast. It is based, among other things, on industry data, internal data and estimates of the Company and is inherently subject to risk and uncertainties. Actual results may differ materially from the assumptions and circumstances reflected in the above illustrative financial information. 2. Assumes BCI5 Index rates + 42% premium (less 5%) commission) + $3,100 in scrubber benefit less $24,540/d in cash breakeven x 12 ships, divided on 43,900,000 shares outstanding Illustrative $/FCF per share2 based on BCI5 Index rates Solid cash return potential 0.0 0.6 1.3 2.0 2.6 3.3 4.0 4.7 5.4 15,900 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 $/share FCF per year BCI5 Index rate

 
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